top ten best bullish things about lucid. you're going to buy the stock. >> is that what you did? is that how you got to this. no. >> no i did it after. >> finally speaking of outsize, i thought the move in gm on the back of the japan trade deal was really more geared towards their local manufacturers. a better look gm here. >> dan. yeah, ibm, you guys had some nice things to say about the quarter. i just wouldn't be a buyer here on that quarter. >> i'm going. >> to go to cmg later tonight and get a burrito. yeah hopefully that'll help. >> earnings chicken no tomatoes. >> csx will get you down here. >> thanks for watching fast mad money jim cramer starts right now.

>> hey i'm cramer. >> welcome to mad money. welcome to cramerica other make friends i'm just trying to make you a little money. my job is not just to entertain you. it's to put it in context. so call me one 807 three cnbc or tweet me jimcramer. sometimes you just can't pin a market down. you see things that are so solid real companies doing real things getting rewarded for them. then you see other companies small cap companies that are being pushed higher by hedge funds and social media with stocks that have no business going higher. it's a broadening market but not broad enough. it's speculative, but not so speculative that it's worth worrying too much about. that's how i feel. on a day when the dow jumped 508 points to be gained 0.7 8%, nasdaq advanced 0.61%. in short, it was a terrific outing for stocks no matter how you feel. so let's play a game. let's talk about what's troubling in this market and what's not. maybe that way

you can figure out how to approach things because boy is it getting confusing. i want to start with the tariff deal that president trump struck with the japanese last night. that's the largest trade deal ever, at least according to the president. make no mistake, this was a terrific deal for both sides. there's now a 15% tariff on japanese products, including cars. win for the treasury, even as it raises the price of japanese cars and trucks for you. but if there was no deal, it would have been almost double that. so the japanese automaker saw their stock soar. no, look, i happen to like deals where you could take either side and still feel like you got a win, and this was one of them. i'm sure japan would have preferred the pre-trump status quo, but this is much, much less extreme than anyone was expecting in april. i say great stuff. buy buy buy. at the same time, though, if you're fed chief jay powell, you're looking at the price of new cars and you have to be worried that inflation hasn't peaked and it might not peak anytime soon. so what does that mean? no rate cuts, bad stuff. now, along with

this deal is a pledge by the japanese to invest $550 billion in the united states. again, a very big deal because the japanese are not really known for their buying of american merchandise. that money will go to all sorts of manufacturing defense, semiconductors, autos, steel. it could be the template for other deals around the world, including south korea and most of all, europe. these kinds of deals are good news for the market because they remove the tariff uncertainty, and 50% is something most businesses can live with. what could go wrong with that? well, we have so many pledges from so many different entities to hire here, yet we don't have nearly enough people to take the jobs. that could be very inflationary. and what happens with inflation? no rate cuts. all of these pledges will ensure that we won't have a dangerous uptick in unemployment, although with a 4.1% unemployment rate, that's not something we need to worry about. remember, as long as unemployment is low, that is good news for stocks. right now,

the only real source of layoffs i see is from artificial intelligence. but there are many areas where it's simply not yet good enough to replace real people. but again, when you have a tight labor market, that's likely to get tighter, thanks to all these pledges, and you have a president who's hard line on immigration. then companies will have to pay up for workers. so what does that mean? we should worry about wage inflation. different kind of inflation quickly spreads throughout the economy. we have to hope that there are plenty of robots ready to do the jobs that can't be filled. or chairman powell no rate cuts until he's done. what else? all right. we're in the earnings season right now. we're really in the thick of darn thing. and the stocks are reacting to very good numbers. sometimes you have good numbers. they don't react. that's not the case this time. the banks set the tone with this good business. and now loan loss reserves are small. again something that happens when you have what we used to call full employment. now we're getting some health care and life sciences. they're all good even if it's small. sample boston scientific, danaher, thermo fisher all roared today. and then let's talk about alphabet, parent of google. that was the star of the after hours show,

beating sales and earnings estimates and delivering strong numbers in the cloud. ai even in search where there were concerns that gemini, their ai bot, might be cannibalizing that incredibly valuable franchise, gemini, turns out, is 450 million monthly average users. that's fantastic. one of the big reasons why the stock exploded during the conference call. oh, on the other hand, though, you got tech companies that aren't getting credit for solid numbers, ibm reported would look like a nice top and bottom line beat after the close. but because it's software business came in a little light, the stock's getting clobbered in after hours trading. i'm not so sure how that right is, but it's happening. tesla though reported a top and bottom line miss. yet the stock is holding up because elon musk told a very good story about robotaxis, as well as new, cheaper models that are supposed to come out later this year. it's a tech company now, as the car business missed estimates and no one seemed to care. so i mean, we have one hand on the other. i mean, look, chipotle wasn't so good tonight. t-mobile was good. i'm fine with that. why? because the good does still outweigh the bad. and that is

very positive. at the same time, though, we got to talk about something that is really starting to bug the heck out of me. you got to talk about froth. froth. that feels like the market for the great recession hit in 2008, or the.com period in 1999, or the spac in gamestock many of 2021 terrible role models. there are some hedge funds and followers of stocks on reddit's wall street bets forum that are that are up to speculative things that make my stomach, well, let's say, churn. i'm not talking about things like the nuclear power plant i've endorsed, which was this very positive in this morning's news. i'm talking about stocks like kohl's, okay, 50% short interest. that at one point doubled because of social media instigation, just to bash the hapless shorts who are truly pressing their bets here. even with kohl's, there's some merit. kohl's used to trade in the 50s, three years ago, and it received three takeover bids right in that level stock. this short busting started. it was a ten bucks having traded as low as six bucks. that's too cheap. downright embarrassing though, that so many hedge funds have been caught with their pants

down again in a situation where there's too much short interest and not enough stock floating around to cover, is something good happens and something good could happen. kohl's has no debt maturities for four years of any size. it has new leadership. it has a fabulous deal with sephora. what happens if one of those acquirers comes back? not a safe short, but away from kohl's. we see things happening that if we had a tough sec, well, we would be against many one and two and $3 stocks are getting bagged, being gunned. and for all i know, being liquidated for a quick win. yeah, i don't want to dignify them with i'm not even going to mention their names here, but i would say that many of these should be investigated. it just doesn't seem right against that. we have gigantic themes that are so strong. you can see how they might be multiyear in nature. take ge bornova, we'll talk about that later. how taxed the workers on the grid are as they mastermind all the humongous orders for the data centers. all parts of the data centers are strong. we know that even from

tonight, with the numbers from alphabet, which is putting in a lot more capex than anyone thought they would, but there are still people who are deeply suspicious of the data center build out. they're calling it overbuilding and don't think the hyperscalers need all that computing power. their skepticism extends to any capital, equipment, stock and any financial services stock. now, maybe they aren't necessarily off base. i serve a fintech company, blew up today and was one nasty comedown. but you know what? people are going nuts for alphabet today and that's going to spill over tomorrow. that stock's been a horse. the bottom line it's mixed some good some bad. you know what. when it gets all good it will be too good. when it gets all bad it will be too bad. maybe right now it's just right. and we should be skeptical, but not cynical because there's too much money being made. and i don't want you to leave the table. peter. in florida. peter. >> booyah. mr. cramer, long time listener and lifetime learner.

>> thank you. fantastic. >> thank you for continuously helping the average hanson france to get a leg up in the game. my question is about uber. i should i have 500 shares. should i accumulate or should i hold on i mean it had a couple of days of drops. >> isn't this interesting? think about what you asked. this is the kind of thing that is fascinating to me now. peter asks should he stay or should he sell? but you know what he should be doing? he should be buying. that's the kind of skepticism. i like healthy skepticism, but the stock is worth buying right here. let's go clear across the country to steve in california. steve. >> hey, jim. how are you doing? >> great day. how about you, partner? >> good. thank you. i'm an investment professional. and every day on my ride to the pool hall after work, i listen to the show. and i love the show. thank you. i woke up to my one of my

largest positions being up 16% $10 a share last friday with barely a mention in the news. it's crispr therapeutics, crsp. >> yeah, you see, here's the deal. there are so many stocks that are going up people don't even like think. it's like, oh man, i forgot about crispr. well, i haven't i think crispr is a terrific, terrific but speculative situation. and i think you should be able to speculate. i think crispr, crispr could either triple or do nothing. that's not a bad ratio. let's go to dave in connecticut dave. >> booyah jim, thanks for taking my call. of course. so i've been a i guess a very called various times over the last 20 years. in fact we met two months ago at in norwalk, connecticut at the phosphorus signing even signing. well that. >> was fun wasn't it? >> that was fun. we were up there at total wine and more. you know, that was a nice crowd up there. it was a really nice crowd. thank you for coming. i really appreciate it. >> it was it was a really nice,

nice afternoon. so and in fact i'm also a founding club member and it's been fantastic having access to all that info. >> thank you. hey, i met this club member who went to the doctor today. i mean the club members like we both, you know, we just kind of chatted about some of the things that we've done, right? he had some ideas too. it is a club. i can't believe it. it really is a club. it is. we talk, you come, you come to the liquor signing. my wife, my wife. now when she has some other stuff to do. that's all right. what's happening? >> well, i just also wanted to thank all of your staff. they're fantastic. and also, you know, in particular the recap of those morning meetings, which i also love, you know, thank you and others that do that. i mean, the unsung heroes here that help us out so much. us. >> man. >> i'm telling you, we are hustling for club members. we really are. how can i help you right now, dave? >> sure, sure. so i've been over time, i guess since the beginning of the year. i've been slowly making small purchases of intuitive surgical. right. and, you know, on weakness. and last night they reported a pretty strong quarter. and they seem to be rolling out the davinci five

pretty well. and yet they still seem to be in the doghouse. and i know they manufacture in the usa and in mexico. so i was kind of waiting to see if they might even benefit from you. >> and i are in the exact same place they were talking about second quarter placement not being that good. i didn't see it that way. dave. i think they've got a lot in the pipe. i'm inclined to recommend the stock. i don't see what the bears were squawking about. and i want to thank you for meeting me up there at the fosforo signing. and you're a terrific guy to be a club member. all right, the picture is mixed right now, but i don't want you to be cynical because there's too many things going right. be skeptical. don't be cynical and don't leave the table. i mean, look at club stock. geneva novo go soaring more than 14%. today. i'm running through the powerhouse of the company, breaking down the numbers then sl green has been a frustrating stock getting clobbered after earnings stock investment 5% yield give you my take. and otis is going down after earnings i'm getting a read on the elevator business which was not up and down. just

down and seeing what clues it can give us on the state of construction, particularly with china and the ceo. so i want you to stay with cramer. >> don't miss a second of mad money follow jimcramer on x. have a question tweet cramer hashtag mad mentions. send jim an email to madmoney.cnbc.com. or give us a call at one 800 743 cnbc. miss something. head to madmoney.cnbc.com. >> welcome to cnbc market destination. >> cnbc plus on the go access to global market data, news and global market data, news and analysis as it wave hello to zane. he's king of the... ping. for every 1 sentence spoken on a call, he has 3 comments 2 memes and 4 emojis to contribute.

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that this thing's trading like it caught a takeover bid up 14.5% today, which is a crazy move for a large capitalization stock. more importantly, ge monster rally makes me look like a genius. well, you know, little ubers there, but because it's a holding in my charitable trust, which you can follow, of course, by joining the cnbc investing club, we brought it back in may and so far we've got a 45% gain. my only regret is we didn't buy more. but you know me, i like to build my positions gradually over time. but this stock's gone up practically in a straight line. so we never got the chance to buy more into weakness. still, it's been an amazing winner. the fact that it can roar today after already being up 91% for the year and more than 280% since it began trading independently 15 months ago. that tells you just how stunning these results really were. coming into earnings, she was already trading at 80 times this year's earnings estimates. very expensive. that means expectations were sky high. yet they still knocked it out of the park. highly unusual to see a big game when you have such a high price earnings. multiple.

before i get into the results, remember why this thing's been running for years under the old general electric. the power business was just awful because these guys primarily make turbines, which is turbines. some people call turbines. they pronounce it turbines. and there simply wasn't that much demand for new power plants. so not a lot of demand for new turbines. then came the rise of the data center, especially for artificial intelligence. suddenly, american electricity demand is growing by 5% per year. it's been flat for years now, 5%. and all sorts of companies are desperate for power, which is why when they need new hardware. at the same time, i repeatedly pointed out that nova stands to be a big winner from president trump's trade negotiations. because if our trading partners want to extend an olive branch, the easiest way to do that is by placing orders for big ticket items like planes from boeing or turbines from nova. they're both about 50 mil a throw, so maybe we shouldn't be surprised that this company reported fabulous beat rates quarterly this morning. and make no mistake, these were phenomenal numbers. nova put up 12% organic revenue growth. walter was only looking for 10.6 their orders, which are

the real key metric here because they're the best gauge of how business is doing right now, grew by 4% on an organic basis, driven by strong demand for power and electrification solutions. now, the power business is about generating electricity, the electrification business is about transmitting electricity. and as you know, both again, those are both parts of the data center boom. and they end. nova posted an enormous 35% earnings, beat off $1.51 basis, fueled by higher than expected margins. now, this was an incredible showing, even with the stock having already more than doubled from its post liberation day lows in april. as ceo scott strizic explained on the conference call, quote, this era of accelerated electrification is driving unprecedented investment in reliable power grid infrastructure, infrastructure and decarbonization solutions. end quote. all of those are bornova's bread and butter. i spoke to him earlier this morning. i got to tell you, i was like, i cannot believe they are everywhere in the electrification chain. in fact, the company's electrification equipment backlog grew by 2 billion in the quarter, with strength pretty much everywhere.

we're talking europe, north america, asia. demand is also accelerating in the middle east, with management highlighting a big deal with saudi arabia, for saudi arabia, for grid stabilization equipment that could be worth $1.5 billion in order volume during the current quarter. oh, on the call, i mentioned that some technologies like synchronous condensers, which are needed to increase power grid stability, have been a small market for over the last decade, but we see this as a credible $5 billion market opportunity a year going forward and are investing in positioning our businesses to serve this opportunity. end quote. basically, the big uptick in electricity demand means we need all sorts of equipment, both to produce more electricity and to keep the power grid from falling apart under the metaphorical weight of that additional power. as for data center electrification, demand management called out nearly 500 million in orders for the first half of 2025, compared to 600 million for the entire entirety of 2024. i mean, it just keeps ramping. how about the backlog, which represents potential future revenues as orders are fulfilled? okay. voronov has combined equipment and services

backlog expanded to nearly $129 billion. that's up 5.2 billion from the previous quarter, up more than 11% year over year. again, again driven by power and electrification. the only fly in the ointment is the declining wind backlog, but that's more than offset by the strength in power and electrification going segment by segment. power business was driven by demand for high efficiency gas powered turbines. they had 44% organic growth, with gas power equipment orders nearly tripling, and their power ebitda margins expanded by 260 basis points thanks to strong pricing, better productivity and higher volumes in gas power and steam power. basically, business is booming here. now. the electrification business actually saw orders fall 31% organically, but that's only because they were up against some really, really tough comparisons. at the same time, the electrification ebitda margin expanded by a stunning 740 basis points year over year. it's only the wind division that was disappointing, but compared to power and electricity, wind

is not that important. i asked scott about it. he didn't say forget about it. he said no. focus on where the business is. even better. management raised their full year forecast. pretty sniffly for they were calling for revenue of 36 to 37 billion. now they'll say it'll come in at the higher end of the range. they've been targeting earnings before interest, taxes, depreciation and amortization margin in the high single digits. now they'll say it will be 8 to 9. that's about as high as you can get. it'll still be in single digits. but the big one is the free cash flow guidance. bruno was forecasting 2 to $2.5 billion. now they say it will be 3 to $3.5 billion going segment by segment management projects. the power division will have 6 to 7% organic growth. previously they've been saying single digits mid single digits. they also raised the ebitda margin forecast for the power business. the wind division, like i mentioned earlier, is bad shape, but fortunately that's the smallest part of the business. finally, there's the electrification division, where bruno is looking for 20% organic revenue growth. when before they were only talking about organic growth in the high to mid-teens. plus they expect electrification business to have an ebitda margin of 13 to 15%. there's

going to be 11 to 13. so i want you to put it all together. and i can tell you i'm still a big believer in this one. but given how much it is run, including today's 14.5% gain, it's hard for me to tell you to buy more at these levels. i'm reluctant to do so for my trust. as members of the cnbc investing club know so well. here's the bottom line ge bornova one of the greatest quarters i've seen in a long time. they shot the lights out and as we told the club, we think the stock is headed to 700. but i feel like you're chasing if you buy it here be a little patient. you know here's a good example. i bet you're going to get a buying opportunity like we have with d.r. horton, up nearly 17% yesterday. good analog right. today it's down 3.5%. i expect a similar pullback for this one, maybe even more since it's rallied so much. so when it comes to bornova. keep your bat on the shoulder right now. and i want you to wait for a better pitch. if you don't already own some mad money is back after the break. >> coming up are the commercial real estate weeks in for a reckoning? cramer's taking a look at real estate giant sl green, and how interest rates

could affect the sector next. >> we've got some breaking news from becky quick. >> the mediation came out at about 5:10 a.m. this morning. chevron was successful in its mediation. and again, this is all over the brookfield in guyana, a very successful oil find. this is a decision that's pretty big news for the market in the terms that it means that that has two acquisition by chevron can go through. >> the deal looks better today at any price assumption than it did when we went into the deal two years ago. two years ago. >> start streami only the servicenow platform connects every corner of your business, putting ai agents to work for people. like secret agents? no, more like... autonomous minions that you control. to do what? well, jim's agents resolve simple customer issues. and patty's agents flag network problems. — proactively. — yup. i'm lovin' my agents. wait, do you all have agents? oh yeah... and on the servicenow platform, everyone's agents work together so everything works better.

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evernorth specialty services because every moment counts. you found it then? >> of course i did. good boy. >> but what the heck just happened to the stock of sl green realty, the largest commercial real estate landlord in manhattan with interests in 53 new york city office buildings totaling over 30,000,000ft■!s. now, this stock

has been frustrating. basically flat over the past 12 months. and it only got worse last week when sl green reported a seemingly strong quarter. and yet its share price got clobbered anyway. before we get to this quarter, though, let's set the scene. last year, the office reached. they were on fire. this one nearly got back to the 2021 highs last november, but then it plunged from $82 and change at its peak down to just over $45 at its post liberation day lows in april. well, sl green rebounded to over $60 as of today. it's still down 27% from its november highs and down nearly 6% from where it was trading a week ago. what went wrong here? look, this is an office real estate play, and anything real estate right now is hostage to interest rates. has soared to an almost three year high last november, not long after the fed started cutting rates. but the moment the fed cut short rates, longer term interest rates soared. and once the fed paused its rate

cuts last december, sl green and the rest of the office saw their stocks fall apart. after all, high rates make financing more expensive for these guys, and they also make sl green's 5.1% yield look a little less enticing by comparison. of course, last month's mayoral primary primary didn't help here either, did it? remember, this is the largest commercial landlord in manhattan, and last month, an avowed socialist, zorian mamdani, won the democratic primary in the new york city mayoral race. that gives him good odds of becoming mayor even in this crazy four way race. and hey, a lot of investors figured that a socialist, even a democratic socialist, might be bad for business. historically, they don't really make the best relationships that they don't get along with landlords. and that's why sl green's stock fell 5.7% the next day. i don't want to dive too much into local politics. you don't want me to either, especially because i don't think the mayor has the power to singlehandedly crush the commercial real estate market. let's just say you got to keep an eye on it. still, if you were hoping sl green could make a comeback after reported

last wednesday after the close, those hopes were quickly dashed when those headline numbers crossed the wire. the quarter it first. it looked really good. sl green seemed like it delivered a big beat. it's substantially higher than expected revenue, up almost 9% year over year with funds from operations per share. that's the real estate investment trust equivalent of earnings coming in at $1.63. wall street was only looking for a buck 38. and that's not going to float that beat through its to its guidance. raising its full year funds from operations forecast by $0.40 from its previous outlook. also much better than what the analysts were expecting. yet it didn't help. stock fell about 4% last thursday, another 1.8% on friday before stabilizing this week. so what on earth went wrong here? simple. the quarter really wasn't as strong as it looked. so yes, we made $130 million investment in a mortgage for a fifth avenue property last fall. and they were able to sell it in the second quarter for $90 million profit. that worked out to roughly 60% benefit, which was offset by a smaller loss on the sale of their stake in a

madison avenue building that worked out to be about 20% hit. together, those transactions resulted in a 40 cent benefit that was included in the funds from operations. result. remember, that's exactly how much they raised the full year forecast by. in fact, when you back out the 40 cent benefit, the quarter itself would have been a sizable miss. all right. there were some other things analysts quibbled with, including some mixed operating metrics, but the dismissal of the one time benefit is the main reason why sl green got no credit for its big beat last week. so let's i want to take this point head on. let me say two things. first, i don't think it makes sense to write off that savvy trade sl green made with its fifth avenue investment. and that's part of the on properties areas. it's a real positive, frankly. look, look, in a way, it's what you buy the stock for. but second, even if you inclined to dismiss that one time item, i'm not too torn up about the fact that the second quarter would have been a disappointment without it. as cfo matt diliberto reminded us on the

conference call, this is a lumpy business, which is why they try to track things on an annual basis rather than going quarter to quarter. if you back out the $0.40, their full year funds from operations forecast to be unchanged at the same time, there was a lot to like from sl green's quarter if you were willing to dig deeper. leasing activity remains very strong. 46 manhattan offices leases totaling over 540,000ft■!s, sigd by the in the quarter, bringing the company's year to date total to over one point 1,000,000ft■!. do you know that that puts the company ahead of its target of 2,000,000ft■!s leased this year? imagine also said that they, quote re refilled the pipeline to over 1,000,000ft■!s for near-term execution. end quote. we also got some good color on the pipeline during the conference call, with management highlighting the diversity of potential tenants in the pipeline across various industries, as well as the fact that they're doing a lot of mid-sized deals. that's positive because it means that green isn't on the knife's edge, with 1 or 2 major deals whose success

or failure will make or break the company. this steady deal flow is much more attractive to me. plus, the company seems like they're finding it easier to ds to give out when it signs new ones. this is a very telling metric, and it fell to 6.3 months pt year. it's the lowest level in five quarters. at the end of the store office occupancy wassame 91.4%. company said it expects that number to get to 30 to 93.2% by year's end. so it all seems well with sl green's core business. finally, i like sl green's long term opportunities. i'm not necessarily talking about the company's current effort to bring a casino to times square. certainly, management has a decent amount of time on the conference call. we don't know if they'll really win that business. i'm just talking structural factors here, like the fact that there's minimal new supply of office buildings in new york these days. and that's what green dominates in class a office properties, which remains the strongest part of the market. so

here's the bottom line. in the short term, sl green stock will remain hostage to factors outside the company's control, like the direction of interest rates. but after this quarter, i really believe that the core business is in good shape. the 5.1% dividend yield is safe, and the stock could be a winner once the fed starts cutting rates again. john in south carolina john. >> booyah jim. >> booyah john what's up. >> oh i'm calling about reit stocks. thinking about real estate with the supply constraints. and you know looking at smaller more nimble groups like net street versus the big guys like realty income. >> so which one do you want me to opine on. >> for a 26 year old investor with a long horizon. just curious what your thoughts are on a more dividend focused real estate play versus growth? >> john, i got to tell you i going to have to say no to realty income. that doesn't mean i don't like it. i like it a lot. you got to go for growth.

growth is the only safety. you should be looking for a nice return. i mean, i'm talking about i'm talking about stocks like like nvidia. you should be in nvidia even right here. i really think that realty income is for people who are a little bit older. what can i say. hey, it's good to be young. nothing about that. let's go to johnny in alabama. johnny. >> hey, jim, love the show. >> thank you, thank you johnny. >> m m p material. what do you think the long term prospect of the stock is? considering the highly unusual government deal? i've heard the government gets half of everything above $170 ebitda. >> so they've got tons of ebitda. no. look, i mean, the stock is stock has moved to 61 now. i have done more work on it. and i really think that i was a little you know, i wasn't negative. but i think there's even more upside. and i think you're on to something really big. okay. look it will be hard for sl green to go higher if interest rates stay elevated. that's what matters. but i think the core business people, people are way too negative about it. long term outlook for the

company still seems excellent now. much more mad money ahead, including my exclusive with elevator maker otis. now that stock plummeted over 12% today. what the heck's going on? i'm going to get to the bottom of the ceo. then i learned early on in my career not to mess with parabolas, but i have a new thesis, and i think it's going to surprise you. and of course, all your calls. rapid fire tonight's edition of the lightning round. so stay with cramer. >> breaking earnings news tesla, alphabet, ibm, intel market reaction expert analysis strategies for your portfolio strategies for your portfolio this comcast business advanced networking and security solutions help turn businesses into... logistics-mastering... supply-chain-transforming... seamlessly-restocking... frictionless-paying... poke-bowl-ordering... cyber-securing... mobile-access-granting... data-managing... welcome-to-the-worlding... modern businesses.

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plays to beat the heat. there's a flex alert, and team california is playing it cool. pre-cooling before 4 pm? that's cold. get the temp down early. but can they turn it up in the fourth? - bang! - the fans are going crazy! no dishwasher, no laundry, no large appliances. we are witnessing flexing perfection. another big win for team california. the power is ours. hair growth. find out more at mike pence .com. >> wow. what are we supposed to make of this 12% sell off in the stock of otis worldwide, the leading maker of elevators and escalators with a huge maintenance business this morning? reporter fourth quarter with sales coming in a bit light. management cut their full year revenue forecast, blaming weakness in china and continued

uncertainty over global trade policies in the united states. it was brutal. but then again, this company's been a steady operator for a long time. so could today's decline be a buying opportunity? and will the company be in there buying with you? let's take a closer look. with judy marx. she's the chair, president and ceo of otis worldwide. find out this morning. welcome back to mad money. >> hi, jim. thanks for having me on. >> okay, so first we want to get one thing straight for our viewers. it really does seem like that the problems are in china and that the other parts of the world are still going strong for you. >> yeah. listen, you know, jim, our stories of service story. 90% of our profits, second quarter service revenue was up 4%. really pleased with how we performed there. our portfolios up 4% again. and even on the equipment side, the new equipment side, you look at orders ex china, we were up 11% with the americas. us is up 15%. asia pac is doing fine. and the middle east and parts of europe

are doing well. we have not gotten over the property market impacts in china and it's impacted our our new equipment business there in terms of revenue. but with our guide and with our outlook, you know, we held we held our eps. we're still going to raise margins 30%. we're still going to generate between 2.4 and 2.5 billion of adjusted operating profit. and position ourselves for a much stronger 2020. >> and you've been buying stock. is this an opportunity, given the fact that i know your 2026 views, which are appreciably stronger than you feel for current? >> yeah. so we bought 550 million of the 800 million we outlook for this year. we're going to generate now because we do get advances with new equipment and with the china new equipment business being down. we've down we've we've changed our outlook on on free cash flow down to 1.4 to 1.5 billion. it's still over a 1.0 cash conversion. so we're still going

to share that with our shareholders. between share buybacks dividends and some some again continuing m&a. >> okay. so before we get to china i do want to ask one thing. you talked about the one america tower in indianapolis. and you seem to indicate that buildings that are from the 1980s do need to be modernized. and there are a lot of buildings from the 1980s that haven't been modernized. so is that market a little bit bigger than we think? >> yeah. the modernization or refurbishment market of existing buildings. it will be the fastest growing market we have in our business. 8 million of the 22 million elevators and escalators in the world today are over 20 years old and are in need of technology, refreshments, safety, refreshments and some total swap outs with with new equipment in existing buildings. that business this quarter for us and orders grew 22%. we've got a 16% backlog in modernization. that's going to keep growing for us and our outlook says, which we fully

believe even for this year, we're going to be up 10% in terms of revenue and modernization. that will grow in 26 and in years after as well. >> now let's talk about china. there are a lot of people have mixed views of china, but i think that you're the one of the few people that actually has a clear view. if your business is weak in china, then china is weak. give us a sense of what's going on now. you go to china very often. what's happened because they would tell you that that business is good in china. the government does not put out really negative figures. >> listen, i think manufacturing is doing fine in china, but when it comes to consumer sentiment and in our case, people buying real estate, that sentiment has been down now for four straight years. the property market is down 40% in terms of people buying new new residential units, in terms of new office buildings, they're still building going on, but it's down 40% from the peak. that's what's

impacting our new equipment business, especially what we call kind of our book and ship business, which in about a six month period we can turn an order into delivery and installation and make a live elevator. you're right, jim, i do go to china quite a bit. i'll be there again very shortly. again, to meet with government officials, to meet with our customers, and to meet with our colleagues to make sure that we not only understand where the market's heading on new equipment, but we also accelerate our service business, which is growing double digits. our portfolio there now for 15 straight quarters. so china up to us looks more like it becoming more of a mature market than an emerging market between service and then modernization. there is going to grow double digit as well. >> so what do you do? you meet with your board. you've got a great board. do you say, look, you can asterisk china or you just have to accept the fact. look, china is part of our mix and we can't asterisk it. it's just the way it is. >> it is part of our mix. it was

about 12% of our revenue this quarter, down from 20% a little over a year ago. but it's an important part of our business. that service business is going to be a key contributor to our future, and we've got about 17,000 colleagues in china. so we're moving to more mature, but we're not resting. there's no asterisks, jim. our board understands this, but we are driving cost out, and we've come up with a basically a transformation program, a restructuring in china that we started in january, recognizing the volumes are down, instead of that being a 30 million run rate savings for us, we just just today announced it's going to be 40 million because we want to get to that price cost place where even though it's competitive in china and the volumes are smaller, we're going to make contributions in china. and our team is working that every day in china. >> one last question. i know it's anecdotal, but look, i live in new york. i look at every single borough. i don't see a lot of cranes. i mean, if i went to most cities in america, would i not see a lot of cranes?

>> well, new york, new york's actually growing in the boroughs and growing nicely, especially residential. the offices are full in manhattan, and we're playing a big role not just in the new offices, but the modernization of new york and all the boroughs. when you leave new york city, when you leave, you know, the major metros. what we're finding is there's huge growth in that next level city, whether it's in nashville, whether it's in indianapolis, whether it's a chicago even there is still growth going on in that next tier city in the united states. it's going on in terms of new equipment, and it's going on in terms of modernization. and then again, our service portfolio, you know, 65% of our revenue, 90% of our profits just goes along strong. >> all right. well, i think that your stock has been overly punished, given the fact that you did not get negative for next year, it would be different if you were saying, listen, this could be multiyear. you're not saying that. i want to thank judy marx. he's the chair, president, ceo of otis

worldwide. otis. judy, thanks for coming on the show. >> thanks so much, jim. >> good money back. >> after the break. >> coming up cramer takes your calls and the sky's the limit. it's a fast fire lightning round next. introducing cnbc plus the new streaming platform from the number one source in business news watch live or on demand news watch live or on demand access any market anytime ♪ hello neffy ♪ ♪ hello neffy ♪ ♪ no needles ♪ ♪ goodbye ♪ say hello to needle-free neffy, the only epinephrine nasal spray for emergency treatment of allergic reactions, including anaphylaxis, that's designed to be fast, powerful, safe, small, and easy, so you can say. hello, dining out. goodbye, missing out. hello, celebration. goodbye, hesitation. hello, freshman year. goodbye, needle fear. use at first signs of allergic reaction. ask your doctor how to use neffy. if you have medical conditions or take certain medicines,

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>> hey, jim. so i took a position in this company in 2005, and since that time i reinvested every single dividend. but i'm sad to say that after 20 years, my cost basis is higher than what the position is currently worth. should i continue to hold, or should i finally throw in the towel and sell? i'm talking about pfizer. >> i can't ask you to do that, because we are still on the verge of finding out what the acquisition does. let's get let's give doctor boyle two more quarters, two more quarters. and then we're going to we're going to we're going to fish or cut bait okay. not yet. two more quarters. let's go to smitty in north carolina. smitty. jimmy, thanks very much for everything. >> you do for the little man. >> thank you partner. what's shaking. >> jimmy i am up about 200% on crowdstrike and i am contemplating selling it and getting into a cybersecurity etf. so i could have a piece of a lot of these. >> companies that. no, you got. look, you have the best, okay? you're the best. other other than palo alto, why has you're

the best to get in one that has a lot of mediocre ones. here's what you're going to do. you're going to take out your cost basis, and then you're going to let the rest run. and i'll see you at $1,000. let's go to scott in new york please scott. >> hey jim. >> booyah booyah. >> what's up. >> i bought it 224 it dipped and it went to 228 now. and it's been it's got a price target of 300 lows. do you buy hold or sell. >> marvin ellison is hitting the ball. he's doing his best. he got the fed chairman won't cut the rates. we don't have a lot of housing turnover. do you think i'm going to quit marvin ellison now. absolutely not. and that ladies and gentlemen conclusion of the lightning round. >> the lightning round is sponsored by charles schwab. coming up is fear of the parabola overblown in this market? cramer is laying out why old school fears may be a thing of the past, and how your

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plays to beat the heat. there's a flex alert, and team california is playing it cool. pre-cooling before 4 pm? that's cold. get the temp down early. but can they turn it up in the fourth? - bang! - the fans are going crazy! no dishwasher, no laundry, no large appliances. we are witnessing flexing perfection. another big win for team california. the power is ours. improve your skin at omni lux. >> i got to be passionate about everything i invest in. >> you want to know about passion? well, i'm not sitting waiting. >> this is my passion. >> i don't have any doubt in my mind that you're going to be

insanely successful. >> shark tank. >> coming up next. cnbc. squawk box tomorrow. former nfl quarterback turned businessman eli manning, the two time super bowl champion, discusses his latest investment. stay ahead of the market. squawk box tomorrow, 6 a.m. eastern and streaming on cnbc plus. >> do not mess with parabolas. they're hazardous to your wealth. look, that's what they learned in the mid 1980s when i got started. it's never steered me wrong until now. this market defies that wisdom, at least so far in 2025. it taunts you with these straight up moves. make sport of you whenever you miss them. that's why we need to talk about the parabolic move. the theory behind selling the stocks that go parabolic is that nothing good can come from a stock that goes straight up. so you better cash out while they're running. until this market, i found it very hard to

recommend anything might be levitating like that, because historically, parabolic moves tend to explode in your face. but you know what? i violated my rule for this market simply because the moves are too big and the opportunity is too frequent to pass on all of them. i don't want you to miss making some big money because of a view that might no longer be relevant. let's take some stocks. take arklow. okay. you might have seen him on tv today. here's a company that i'm asked about every couple of weeks, one that's working on new nuclear technology. i felt that the stock's parabolic run from $21 to $31 was just too steep for me, even as i'm a huge believer in nuclear. finally, i switched my view and told people to buy it regardless of the parabola, because it's just so much going for it. today also announced an integrated power solution for data centers might be worth billions to the shareholders. it turnkey solution no one else has. the stock has now doubled since i waved my parabola ban doubled. same with joby aviation, known to some as the flying car company. i was

hesitant to say anything positive about this one because going straight up for 6 to 8 bucks. but then i read that boeing had a flying car two. one with a vertical takeoff feature. and i believe that joby's ahead of boeing. so i recommend it on a small pullback next year. the stock's at 17 and change more than a double. again the parabola of fear wrong. we talked about earlier in the show right. the more i learned about this company the more i wanted to buy it from my charitable trust. but the stock never came in i mean never. so finally, instead of giving up on it, i just broke my rule and bought some shares in the darn thing. the stock's been a huge win ever, even after it went parabolic. these moves aren't supposed to be sustainable. but then again, these guys make power plant equipment in a world that's starved for electricity. now you know that acronym i came up with park, prc, palantir, applovin, robinhood and coinbase. that's been spot on, even as i'm not encouraging anyone to buy any of them. i'm simply pointing out that they're straight up stocks, especially palantir, which had a bad outing

yesterday but was right back today flying $5.50 to about a point below its high. once again, these parabolic moves feel justified because all four have explosive earnings streams. in that sense, it's a heck of a lot easier to justify buying park than so many of the other stocks like adobe. or what is the solution to this? look in my forthcoming book, how to make money in any market, i have banished my anti parabola bias. i have a method i reveal at picking five stocks to go alongside an index fund, with some money added each month. i state point blank that if you're in your 30s or older, you should own one speculative situation like an oslo or a job. just one. it could fail you after going parabolic. moreover, if you're under 30, you can pick two speculative names out of five because you've got enough time to make back any potential losses. now, you may think i'm reckless for endorsing any of these, even with caveats, but it's time to admit that for many years now, speculative stocks with great growth. they've worked on. let's not forget they

don't have to stay speculative. nvidia stock has had many parabolic moves, including the one that started in april. to keep yourself out of these runs because of a principle that stopped working ages ago, that's to be blind to change. and i don't like it. i don't want to be that way. i will always fear parabolas in my heart. look in my heart of hearts i will fear. but in the end, i have to be an advocate for buying stocks that have moved a lot. the great ones have gone parabolic many a time. from now on, i refuse to be a hobgoblin of little minds. i like to say there's always a bull market somewhere just for bull market somewhere just for you. right >> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." or fight each other for a deal. this is "shark tank." ♪♪ peter ferreira, and dennis iannoti,